In response to Little Sparrow's post as well as other comments I've received since launch:

Yes, our current policy is to allow hentai on the site, and there's a very good reason for it. It takes a little bit of explanation, but here goes:

In Japan, anime is a very heavily sexualized medium. Even series that aren't hentai frequently have fanservice, and fans frequently draw their own erotic doujinshi (self-published manga) of the characters. These doujinshi are tolerated by the copyright owners largely because they don't want to irk the fans and because doujinshi creators are the pool of talent from which they will frequently draw to find new original mangaka. The world's largest comics convention-- yes, ANY kind of comics, period, anywhere --is Japan's Comiket, which happens twice a year and is devoted almost entirely to the sale of this doujinshi (although it's not all erotic, nor is it all based on previously published works-- but the majority is).

On top of that, a lot of anime these days comes from pornographic games. Kanon? Fate/Stay Night? Comic Party, Da Capo, Shuffle!, To Heart, Tsukihime, Utawarerumono-- these are all popular, mainstream, non-pornographic anime that are based on hardcore porn games. There are often erotic or fanservicey figures made of characters from mainstream anime, not to mention dakimakura (pillowcases made for those long body pillows that have female anime characters printed on them, so you can snuggle with them at night), and plenty of shows that really blur the line between hentai and non-hentai.

In other words: it's extremely difficult to try and take the sex out of anime. So for now, at least, we're leaving it in.